Tata Motors and Oriental Insurance Jointly Liable for Car Fire Loss.
15 July 2025
Insurance >> Personal Law
Three appeals were preferred against a common order dated 28 November 2022 made by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur. The case of Tata Motors Limited & Ors Vs Nitin Gupta & Ors. was based on a complaint by a consumer whose new car caught fire within 20 days of purchasing it, resulting in total loss. The car had been insured comprehensively with Oriental Insurance Company Limited.
Background of the Case:
The complainant's car was totally destroyed on 20 November 2018 after it caught fire as soon as the ignition was turned on. The case was reported to the insurer, and a spot surveyor visited the scene the following day and verified the loss to be genuine. The surveyor indicated that the fire could have been caused by a short circuit.
Subsequently, a last surveyor commissioned by Oriental Insurance, and an electrical inspector, reported a likely manufacturing defect in the ignition system or wiring. Following these reports, the insurance company rejected the claim on grounds that the damage was within the exclusion clause of the Commercial Vehicle Policy since it consisted of an electrical breakdown. It contended the responsibility rested with the manufacturer, Tata Motors.
Tata Motors, however, rejected that it was a manufacturing defect, saying there was no evident proof connecting the fire with defective wiring. It said that as the car was comprehensively insured, the onus should lie with the insurer.
The other company, Tata Motors Insurance Broking and Advisory Services Ltd., was also listed in the complaint, but it contested that it had nothing to do with it as it did not produce the vehicle or the insurance policy.
Conclusion of the Commission:
The Commission went through each report and submission thoroughly:
- The spot surveyor had definitively recorded that the entire wiring assembly had burnt in the fire, eliminating subsequent findings regarding wrong insertion of wires.
- The last survey was also delayed by months, and its conclusions were therefore speculative.
- The technical opinion of the insurer was not evidentially reliable, and firm expert evidence of a manufacturing defect was not present.
- As the cause of fire could not be established with certainty, and no assumption was made that the complainant had caused it, the exclusion clause of the insurance policy could not be invoked.
The Commission further held that the insurance broker was not liable since no relief was sought against it and it did not have any contractual function beyond broking services.
Final Order:
- Tata Motors Limited and Oriental Insurance Company Limited were made jointly and severally liable for the loss. They have to bear the liability in equal shares (50% each).
- Tata Motors Insurance Broking & Advisory Services Ltd. was relieved of liability, and its 25% deposit made during litigation was directed to be refunded with interest.
- The complainant is liable to be paid sums already deposited by Tata Motors and Oriental Insurance to the State Commission with interest.
- Tata Motors is required to deposit its balance share of liability (25% plus interest accrued at 9% per annum) within a span of two months.
Conclusion:
The National Consumer Commission confirmed that where the origin of a fire in a new vehicle is uncertain, insurers are not in a position to deny liability with exclusion clauses. Inasmuch as Tata Motors had also failed to eliminate potential defects, both the manufacturer and insurer were held jointly liable. The complainant was therefore assured proper compensation for the complete loss of his car.